Pawan Castings (Meghalaya) PVT. LTD. vs. The State Of Meghalaya And 4 Ors.

Held

The Court, without going into the merits of the matter, permitted the petitioners to make a further representation, if any. It directed that after hearing the petitioners in person, a decision shall be taken by the authorities within a period of eight weeks from the date of receipt of the order. The Court explicitly stated that all factual and legal submissions were left open to the petitioners to raise within four weeks from the date of the order. The authorities were directed to consider these submissions and take a decision expeditiously within eight weeks of receiving such representation. The Court made it clear that no finding on the merits of the writ petitions was rendered and all issues remained open. The ratio decidendi is that representations concerning policy promises, especially in the context of industrial incentives in North-Eastern states, should be considered expeditiously by the State authorities and the GST Council. The operative direction was to allow the petitioners to make further representations and for the authorities to decide upon them within a stipulated timeframe.

Facts

The petitioners, Meghalaya Cast and Alloys (P) Ltd., Pawan Castings (Meghalaya) Pvt. Ltd., and M/s Nezone Pipes and Structures, filed writ petitions seeking a writ of Mandamus. They prayed for the formulation of a scheme or issuance of a notification to give effect to promises made in the Meghalaya Industrial Investment Promotion Policy (MIIPP), 2012, and Meghalaya Industrial Investment Promotion Scheme (MIIPS), 2016. Specifically, they sought 99% remission of SGST paid after GST became applicable, for industrial units undertaking substantial expansion. They also sought a refund of 99% SGST paid from July 1, 2017, to June 2020, along with interest, based on these policy promises. A representation dated July 13, 2018, was pending before the authorities.

Key Issues

1. Whether the Respondent Authorities are obligated to formulate a necessary Scheme and/or issue a necessary Notification to give effect to the promises made in the MIIPP, 2012 and MIIPS, 2016 regarding the grant of 99% remission of SGST paid by industrial units undertaking substantial expansion, after GST became applicable? (Question of law and mixed fact/law, turning on the interpretation and enforceability of the said policies). 2. Whether the Respondent Authorities are obligated to grant a refund of 99% SGST paid by the Petitioner companies from 01.07.2017 to June, 2020, along with interest, based on the promises made in the MIIPP, 2012 and MIIPS, 2016? (Question of law and mixed fact/law, concerning the refundability of SGST based on policy promises). Petitioner's Arguments: The petitioners contended that the Respondent Authorities are bound by the promises made in the MIIPP, 2012, and MIIPS, 2016, and should therefore grant the promised 99% SGST remission and refund. They relied on the representations made and the expectation created by these policies. Respondent's Arguments: The judgment does not explicitly record arguments made by the Respondent authorities. However, it notes that the GST came into force as early as 2003 and refers to a Supreme Court judgment in Hero Motocorp Limited v. Union of India, which discussed the role of the GST Council and the possibility of State Governments reimbursing units from their share of revenue.